BENTONVILLE, Ark. — Although Wal-Mart's quarterly financial report last week showed earnings were down, the retailer here highlighted progress against competitors, particularly for groceries at its U.S. stores.
Wal-Mart said expenses for lawsuit settlements and an unfavorable currency exchange rate contributed to a 7.4% decline in net earnings for the fiscal fourth quarter, which ended Jan. 31.
For the quarter, Wal-Mart reported net income of $3.8 billion on sales of $109.1 billion. Quarterly sales improved by 1.7%, with Wal-Mart's U.S. division reporting $71.5 billion in sales, a 6% increase from the same period last year, and U.S. comps of 2.8%, excluding fuel.
For the fiscal year, Wal-Mart's U.S. sales improved 6.8% to $255.7 billion, with total comps excluding fuel up by 1.4%. Officials in a conference call said that legal settlements reached over the last year totaling $251 million impacted fiscal year earnings by around 6.4 cents per share. Wal-Mart in December said it had settled 63 wage-and-hour lawsuits.
Eduardo Castro-Wright, the newly named president of Wal-Mart's U.S. division, said the retailer had made improvements in labor scheduling that is expected to offset wage increases for its workers. He also highlighted improvements in store service, including faster checkouts that have improved customer satisfaction scores. Some of these changes will now be implemented in stores worldwide, the company added.
In grocery, “we continue to increase the price gaps between our competitors and Wal-Mart in food and consumables, and have done so while protecting gross profit margins,” Castro-Wright said. He added that the chain has benefited from a trend toward consumers eating more at home — noting that the trend was also evident in increased sales of cooking and dining-related products.
Wal-Mart's U.S. fiscal 2009 comps, excluding fuel.